Cash deposit addition deleted where explanation of prior withdrawal was not properly verified and appellate order lacked reasons.

Cash deposits were held not taxable under section 69A where the assessee explained that the deposits came from an earlier cash withdrawal and that the wrong PAN had been given to the bank because of similar names. The appellate authority had not effectively verified the explanation or the supporting bank statements, and its order was found to be cryptic and lacking proper inquiry and reasons as required under sections 250(4) and 250(6). On that footing, the addition was deleted.

---

---

Issues: Whether the addition made under section 69A on account of cash deposits of Rs. 9,00,000 was sustainable, and whether the appellate order complied with the requirement of proper inquiry and reasoning.

Analysis: The assessee explained that the cash deposits were sourced from a prior cash withdrawal and that the wrong PAN had been furnished to the bank due to similarity of names. The record also showed that the explanation and supporting bank statements were not effectively verified by the appellate authority. The order was found to be cryptic and not in consonance with the duty to make appropriate inquiry and pass a reasoned order under sections 250(4) and 250(6).

Conclusion: The addition under section 69A was not sustainable and was deleted.

---